UPDATE: Jan. 13, 2020: HSBC has kicked off the sale of its French retail operations, Bloomberg reported Friday, contradicting comments a union representative made to Reuters in September. The bank has sent an overview of the business to potential buyers, including French banks Credit Agricole, BNP Paribas, La Banque Postale, Credit Mutuel and Milleis Banque, and private-equity firms such as Apollo Global Management and Cerberus Capital Management, sources told Bloomberg.

The cost-cutting measure by HSBC's interim CEO Noel Quinn could transition 4,000 to 8,000 employees off the bank's payroll, a person with knowledge of the matter said in October. The buyer would control HSBC's deposit base in France and about 230 branches.

Dive Brief:

• HSBC has no plans to sell off its French retail arm, a union representative told Reuters on Thursday. The news follows a Wall Street Journal report that the London-based bank plans to cut businesses in France where it lacks scale or strategic need.
• The bank has reduced the number of countries in which it operates from 87 to 65 since 2011, and has exited more than 100 businesses.
• The rumors come at a time when the bank is planning to grow its branch presence and improve its performance in the U.S., where it has underperformed for years.

Dive Insight:

The Wall Street Journal's report that the bank plans to sell off its French unit comes amid a review of HSBC's operations worldwide by interim CEO Noel Quinn.

If true, the plan would mark the first major change under the leadership of Quinn, the bank's former global commercial banking chief, who was appointed to the interim role in August after the departure of former CEO John Flint. The HSBC board decided new leadership was needed, the Journal reported. Quinn is a candidate to take the permanent CEO job.

The bank has about 800,000 customers in France, where it also has 2% market share in retail deposits and lending.

During a meeting between union representatives and local management, the bank said it is closing nine branches, but selling the business was not on the table, a source told Reuters.

As rumors about the bank's future in France swirl, HSBC has made clear it plans to boost its branch network in North America.

The bank in June announced plans to add 50 branches in new and existing U.S. markets and hire an additional 300 employees. HSBC for years has been trying to turn around its U.S. business, which has suffered because of its foray into subprime lending, according to Reuters.

The bank in 2003 bought consumer lender Household, which exposed it to the collapsing U.S. subprime mortgage market during the 2007-08 financial crisis.

The exposure cost HSBC billions of dollars in writedowns and lawsuits, and a settlement with U.S. regulators wiped out almost all of its profit from North America for the first half of 2018, Reuters reported.

To help with the turnaround, the bank hired Citigroup veteran Michael Roberts to replace Patrick Burke as CEO of the U.S. arm when Burke retires this year.

Roberts spent 34 years at Citigroup as its chief lending officer and global head of corporate banking and capital management.